THE SHIPPING REVIVAL
Having expressed a hopeful view of the prospects of British shipping early in the spring, I like the way events are shaping. The advance in freights which began towards the end of 1936 has not merely been consolidated but has made fresh progress, so much so that the average level of freights is now about 20 per cent. above that of 1929. The movement of larger quanti- ties of wheat, cotton, oil, rubber, base metals and manufactured goods is the mainspring of the improvement in freights, but it has been strongly reinforced by the rising trend of commodity prices. Goods which are fetching x + 20 per cent. in the world's markets can stand a considerably higher cost of trans- port than goods which have to be• sold for merely x. So far as can be foreseen, there should be no let-up in the rising demand for tonnage on most of the big routes. Inter- national trade is definitely broadening out and the present level of commodity prices should at least be maintained. On the other side of the equation, the latest figures of laid-up tonnage issued by the Chamber of Shipping show that virtually every British ship is now in employment ; in other words, the problem of surplus capacity has been solved: What is the moral for investors ? Shipping shares have risen substantially in price since I singled them out for the speculative investor in the spring, but they are not over-valued in relation to the greatly-improved prospects. I still think Furness, Withy ordinaries, at 28s. 6d., and P. & 0. Li deferred, at 34s. 6d., are worth including in any well-spread portfolio.
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